Adverse selection and unraveling in common-value labor markets

We investigate a common-value labor setting in which firms interview a worker prior to hiring. When firms have private information about the worker’s value and interview decisions are kept private, many firms may enter the market, interview, and hire with positive probability. When firms’ interview decisions are revealed, severe adverse selection arises. As a result, all firms except for the highest-ranked firm are excluded from the hiring process.

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Year of publication:	2013-09-18
Authors:	Siegel, Ron ; Ely, Jeffrey C.
Published in:	Theoretical Economics. - Econometric Society, ISSN 1555-7561. - Vol. 8.2013, 3
Publisher:	Econometric Society
Subject:	Adverse selection \| unraveling \| interviews

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Extent:	application/pdf
Type of publication:	Article
Classification:	D02 - Institutions: Design, Formation, and Operations ; D82 - Asymmetric and Private Information ; J44 - Professional Labor Markets and Occupations
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010691957